Markets to make a positive start of the new week and month

The Indian markets suffered sell-off in last session with major averages witnessing cut of over half a percent, today the start of the new week and month is likely to be in green and some recovery can be expected, tailing the gains in the other regional markets and eyeing the Manufacturing PMI data. Traders will be getting support with the government listing the Constitutional Amendment Bill for introduction of GST in Rajya Sabha for consideration and passage this week. Union Home Minister Rajnath Singh has expressed confidence over getting the long-pending GST bill passed in Parliament. Meanwhile, Union Finance Minister Arun Jaitley has said that India needs to see if the target of becoming a developed country can be achieved by 2030. He added that the government will always do investment, but investment from private sector will come only if India becomes the best place to invest. Traders will also be getting some support with a survey of industry body Assocham stating that India Inc expects growth in sales and profitability to pick up by the year-end in sync with an uptick in the big macro picture. There will be some buzz in the oil marketing companies, as Petrol price was on Sunday cut by Rs 1.42 a litre and diesel by Rs 2.01 per litre, the third reduction in rates this month on global cues. The steel stocks too will be in action with the Union Minister for Steel Birender Singh stating that the Centre is making all efforts to boost steel production so that India could become the second largest steel producer in the world.

There will be lots of important result announcements to keep the markets ticking. Tech Mahindra, Tata Communications, Hotel Leela, Nitco, Century Enka, Delta Corp, InterGlobe Aviation and VRL Logistics are among many to announce their numbers today.

The US markets continued their consolidation run and ended flat in last session, though Nasdaq extended its recent upward trend to reach its best closing level in a year after Google parent Alphabet reported better than expected second quarter results. The Asian markets have made mostly a positive start, as the weaker-than-expected reading on American gross domestic product raised hopes that US Fed will not be hiking rates anytime soon. The Chinese market was in red, as an official gauge showed Chinese manufacturing dropped back into contraction territory in July.

Back home, Indian stock indices showed a disappointing performance in Friday’s trading session after a resilient show in previous one. Sentiments remained impacted with the Credit rating agency, ICRA stating that the Reserve Bank of India (RBI) is unlikely to cut policy rates in its upcoming monetary policy review on August 9, 2016. It said the central bank is expected to keep rates unchanged for now as the Consumer Price Index (CPI) inflation at around 5.8 per cent in June is close to upper end of the RBI’s target of 4 per cent (+/- 2 per cent). Discouraging leads from the Asian markets too proved as a big dampener for the domestic bourses as sentiments were weighed down by the Bank of Japan’s policy decision. However, losses remained capped with the report that foreign direct investment (FDI) into the country grew by 7 per cent to $10.55 billion during the first quarter of the current financial year. The sectors, which attracted maximum FDI during the period, included computer hardware and software, services, telecommunications, power, pharmaceuticals and trading business. Investors got some comfort with efforts to hammer out a consensus on the Goods and Services Tax bill gathering momentum. Finance Minister Arun Jaitley and Chief Economic Adviser Arvind Subramanyam held several rounds of talks with leaders from opposition parties. Congress the main opposition described the exercise as ‘constructive and positive’ and the bill is likely to be tabled in the Rajya Sabha next week. Meanwhile, water levels in 91 major reservoirs in India rose 9 percent in the past week, as heavy rains lashed their catchment areas, but remained lower compared with those at this time last year and the 10-year average. On the global front, Asian markets ended mostly lower on Friday, while European shares advanced in early trade. Back home, the local indices got off to a sedate opening tracking the dismal leads prevailing in Asian markets, as the Bank of Japan acted narrowly on easing policy, avoiding pulling harder on levers on negative interest rates and asset purchases. The selling pressure accentuated in the mid morning trades as investors took to across the board risk aversion. The key gauges made some attempts to claw back into the green zone in early afternoon trades but profit booking at higher levels dragged the key indices to the lowest point in the session. Finally, the BSE Sensex ended lower by 156.76 points or 0.56% to 28051.86, while the CNX Nifty dropped 27.80 points or 0.32% to 8,638.50.